Australian (ASX) Stock Market Forum

AUM - Australian Mining Investments

Status
Not open for further replies.
Jump to new
I think Alan Kohler's program is actually on "Inside Business" - ABC on Sunday at 10.00am.
Cheers, Capt.
 
Captain G said:
I think Alan Kohler's program is actually on "Inside Business" - ABC on Sunday at 10.00am.
Cheers, Capt.
Click to expand...

yep

http://www.abc.net.au/insidebusiness/

http://www.smh.com.au/news/business/a-new-poseidon-adventure/2006/07/14/1152637872659.htm

A new Poseidon adventure
Email Print Normal font Large font July 15, 2006
Page 1 of 3 | Single page
The wild days of the late 1960s are being revisited, writes Jamie Freed, as small mining companies talk up their prospects.

IT BEGAN slowly. An announcement to the stock exchange listed some promising drilling results from a little Gold Coast-based company called Australian Mining Investments.

It sounded like the perfect story for a veteran Sydney stockbroker to sell to his clients. Barry "the Bull" Dawes hit the phones, telling them he was about to issue a glowing report saying the company's find had a potential value of up to $US17.5 billion ($23.2 billion).

Investors latched onto the story. After all, they thought, it could be the biggest Australian minerals discovery in years - another Olympic Dam in the making. Even better, it would come during a massive mining boom driven by China's industrialisation, which has driven copper prices to a record high.

Memories of past boom-and-bust cycles were easily swept aside as they piled into the hot stock. Little did they know it could soon be a cautionary tale, a throwback to the heady days of the 1969 Poseidon nickel boom when stocks ran on little more than rumour and fell hard when the facts were finally revealed.

There was little cause for concern while the money flowed in. By July 5, AMI shares had rocketed so far since late May that if you had got in at the right time, a $1000 investment was suddenly worth $33,000. Day traders were dreaming of retiring off their spectacular proceeds.

AMI's colourful executive chairman, Wayne McCrae, fed the frenzy. The industry veteran epitomised the legend of the hard-working, straight-talking Aussie made good. The value of his personal holding in AMI had skyrocketed from $3 million to more than $120 million in less than six weeks.

The AMI story was a dream come true for the average investor and the talk of the entire mining industry.

Then, amid the madness, AMI suddenly halted trading in its shares, pending the release of further drilling results. Investors eagerly awaited more good news.

That was at 11am on July 5, just after the stock hit a record high, which briefly made AMI a $1 billion company.

The shares have not traded since.

Concerns about AMI's level of disclosure and whether the deposit will ever actually be mined have since grown exponentially.

The bullish report from Sydney stockbroker Martin Place Securities, which sparked the buying frenzy, still has not been issued. Its author, Barry Dawes, readily reveals he owns shares in AMI and has helped the company conduct capital raisings.

Outwardly, McCrae has maintained his confidence, famously calling his critics "dickheads". But for many, the AMI story is an unwelcome reminder of the dark side of the traditional boom-bust mining cycle.

Take the infamous 1969 Poseidon nickel boom. Trevor Sykes, a long-time mining columnist and the author of The Money Miners, says that between 1968 and 1971 more than 240 companies listed on the stockmarket, raising $900 million from investors.

And on that initial capital, he says, not one of them found a mine. "I would expect the odds to be higher today, though," Sykes says. "The mining game, by and large, is a lot more honest than it was then."

In the case of AMI, its reporting standards have been questionable. There is almost no doubt that it has drilled some holes that have found high grades of copper. But without maps that locate the holes, it's impossible to judge whether they have all been drilled through one small patch of dirt or extend through a big enough area to make a viable mine.

To add to the concern, McCrae insisted on going ahead with a shareholder meeting in Cloncurry on Wednesday to issue him an options package worth $46 million, due to AMI's huge share price gains. He explained it was a just reward in return for years of doing it rough in Cloncurry on a $60,000 salary.

But the meeting didn't exactly go as planned. In a highly unusual move, the Australian Securities and Investments Commission asked for an urgent court injunction to stop the vote on the options package. The regulator believed the low-priced options were "materially out of date" due to AMI's huge share price rise.

But McCrae had already capitalised on the share price gains, converting $55,000 of options to a shareholding worth nearly $2 million on paper.

Meanwhile frustrated investors sought out the next big thing during the prolonged AMI trading halt. The most obvious targets were other aspiring copper miners in the Cloncurry region, like Exco Resources.

By July 5 - the last day AMI traded - Exco shares had doubled compared to the previous week. It has since been revealed that one of its directors, Craig Burton, sold nearly $1.4 million of his company holdings in that period.

Then this week, Papua New Guinea copper hopeful Frontier Resources capitalised on the copper frenzy by repackaging two old announcements pointing to "hypothetical reserves" worth billions of dollars. Shares quadrupled in less than two hours before the stock exchange halted trading.

As a Fat Prophets mining analyst, Gavin Wendt, points out, "hypothetical reserves" are just that: hypothetical. "Most deposits are worth billions of dollars of in-ground metal," he says. "The difficulty is the risks involved in actually getting them into production."

McCrae admits it will take two more years of drilling before AMI knows enough about the Rocklands deposit to consider constructing a mine. It could take five years before Rocklands produces any copper and, by that point, the price of the metal could plummet. "Three years ago they could have struck this and hardly stirred the stock," Sykes says. "What it reflects is the mood of the market."

Meanwhile, with the little public information available, it is not known whether the copper at Rocklands can be processed economically.

McCrae has repeatedly declined to speak to the Herald and respond to his critics.

After more than a week of waiting, no one knows whether AMI's share price will rocket or plummet until the contents of the release to the market are divulged. An update on Friday suggested the release could come early next week, once geologists appointed by the stock exchange approve the

announcement.

What observers know is that the AMI saga has wider implications for Australia's mining industry. Some have begun to wonder if this speculative action is a sign the resources bubble is about to burst.

"Promoters are taking advantage of market sentiment," Wendt says. "It's staggering what's going on. It's really getting out of hand."
Click to expand...
thx

MS
 
I haven't got a shareholding or other interest in the frenzy but I am still pretty annoyed with the amount of negativity and jounalistic licence that this Jamie Freer seems to inject into his stories.

Once again he brings up this comment
But McCrae had already capitalised on the share price gains, converting $55,000 of options to a shareholding worth nearly $2 million on paper.
Click to expand...

Now tell me if I am wrong BUT Mcrae's paper profit was exactly the same whether he converted these options or not. From what I understand he in fact sold a small number of shares to give him the money to convert the options. What this did was inject cash into the company because although the share price was soaring the company was not actually getting any cash gains out of it. I would have thought this was a very sound way of getting liquid into the company that was going to have to start spending a large amount on proving up the reserve and this without having much if any effect on McCrea's paper or actual nett worth.
I find JF's reporting a bit offensive and hope he wears a lot of egg from it although it does not affect me personally.
This might explain his peeve
McCrae has repeatedly declined to speak to the Herald and respond to his critics.
Click to expand...
John
 
sangshim said:
Both news on the Australian and SMH sounds really bad.
Are we all doomed or what?
Click to expand...
Looked into my tradingroom diary today to see that AUM Aust Mining Invest had been suspended as of 6/7/06 P/E Ratio :-718.18 . I think you must be doomed -(wow).
I think now must be a good time to sell out. I wonder what it means?
Extraordinary value all the same, now we have to wait for Mr Copperfield to organize what happens to it all (where/hows it going), Is it real copper, did he drill on someone elses property or land claim. Certainly looks real?:cool:
 
Just finished watching Ch9 on cudeco thought it was pretty biased reporting and a bit of sour grapes chucked in by people that do not know what copper looks like.{My opinion only}.
 
Gruezi..
Early last Thursday afternoon I recommended SED on this thread (p. 16) and then on Friday, the very next day by pure fluke, AuSelect made a takeover bid for them which saw the share price leap almost 40%. I don't suppose anyone bought on my advise? I wouldn't have thought so. lol. Though one member did send me a private message telling me that they did buy in however they bought after the takeover offer was announced @$0.295 which I wouldn't have suggested. The AuSelect takeover offer values SED at about $0.30 per share and it is very unlikely in my opinion that there will be a second bidder. Anyway I bought close to 250,000 SED shares around this time last month and have made a tidy little profit although it sort of pales into insignificance considering the very much unexpected profits I have made on AUM recently.

Like I said I sold about 90% of my stake in AUM at $3 on the Monday prior to the trading halt and continue to hold more than 9,000 shares so I am still in the game but at the same time no matter what pans out I have been a very lucky girl. Sure AUM traded as high as $10 not two days after I sold most of my shares at $3 but how could anyone not be happy with a return of more than 1700% in 4 months.
 
For those who don't watch Business Sunday on Channel 9, you can read the full transcript "Copper stopper" from Ninemsn web site

http://businesssunday.ninemsn.com.au/article.aspx?id=114295

==
"There have been a number of instances, in my mind, of the company not adhering to proper reporting standards."

The rise and rise of the share prices of copper explorer, Australian Mining Investments (AMI), has brought back memories of Australia's own Poseidon Adventure, but with the stock still suspended at week's end, there is much speculation about what's in store for AMI. The release of drill results has been delayed, and shareholders who have ridden the crest of the wave are anxiously awaiting the outcome. Helen McCombie discovers why AMI has suddenly become Australia's most talked-about mining company.

...
==
 
When Wayne makes the comment that there is no insto money in this - you can see from some of his comments why this is so.


McCOMBIE: So when would you expect to start mining something?

McCRAE: Well, that's a good question. It depends where we go to from here, and so, how long's a piece of string and the answer is, twice as long as half of it.


and on Inside Business (transcript not available yet) he was saying they weren't releasing all the drilling data (spacing, cross sections etc) because he would be giving information away to his competitors (!!)

What a goose.

Pity his poor shareholders in at bargain basement prices.

They have a right to know whether they should be selling their shares in a market that has just created a massive windfall.

But instead Wayne wants to keep it a secret and issue himself and his mates $60m worth of options.

Instos are running other people's money and have obviously undertaken their duty of care in this instance.
 

Attachments

  • ROFL.GIF
    ROFL.GIF
    2.9 KB · Views: 157
BSD said:
When Wayne makes the comment that there is no insto money in this - you can see from some of his comments why this is so.


McCOMBIE: So when would you expect to start mining something?

McCRAE: Well, that's a good question. It depends where we go to from here, and so, how long's a piece of string and the answer is, twice as long as half of it.


and on Inside Business (transcript not available yet) he was saying they weren't releasing all the drilling data (spacing, cross sections etc) because he would be giving information away to his competitors (!!)

What a goose.
Click to expand...


Yes I thought his performance on Inside Business was unimpressive BSD.

His argument about not releasing the drilling data due to unfair advantage to competitors was just cowboy stuff.

I am the first to admit that I don't know a lot about mining but he said that "Xtrata surround us". Well....aren't Xtrata a huge operation? Wouldn't they be pouring ****loads of their own money into finding ridges and lines without waiting for Wayne's pissant operation to release data findings?

Duckman
 
Gruezi
I have had private messages from a few people now thanking me for the recommendation. I really didn't expect that anyone would have bought on my advise at all, even less so given the little amount of time they had before the announcement of the takeover offer. 40% in 24 hours isn't too bad is it. lol.

As for how far this has to run.. well they do say that the first offer is rarely the last and a lot of shares were bought Friday @$0.29- $0.295c. Newcrest may just decide they would prefer to have a 100% stake in Cracow rather than a new partner and come out with a higher bid. Though I couldn't imagine a bidding war taking place. SED may even release some promising exploration results or just come straight out suggesting the company is potentially worth significantly more than the offer. Maybe AuSelect will be forced to add a sweetener to their initial offer or maybe they will drop out. Maybe there is another 10/ 15% to be had for SED shareholders or maybe the current offer will fail without any subsequent bids and SED shares will drop a few cents or maybe the offer will pass as is. Who knows.
 
The first orders are trickling in. This is gonna be interesting. No buyers yet... :eek:

BUYERS SELLERS
Orders Quantity Price Price Quantity Orders
1 1,000 1.500 1 7.500 6,024 3
2 11.500 5,100 1
3 12.000 5,400 1
4 15.000 500 1
5 20.000 200 1
 
I don't hold any but good luck to all those who had bought in.

MIT
 
IAP is currently 4.70 (9:33am), i remember someone asked that question a few days ago.
 
Lots of seller with low prices
no buyers at the moment
settlement price $3 ???
wow this is really cheap or ..... ???
 
good news.
preliminary analysis of the announcement confirms what we already know, in regards to current and future anticipated data. There doesnt seem to be major players jumping in as yet, so it looks like small time speculators will be playing with the price at market open, this means nothing to me at this stage.

i think it could be a good buying opertunity. wait and see! :)


as always, you should all seek your own professional advice before investing.

good luck.
 
Status
Not open for further replies.

Similar threads

R
The Financial Endgame
Replies
18
Views
9K
qldfrog
qldfrog
Top